Baroness Vere of Norbiton: My Lords, I will have to write to the noble Baroness on the last point, but I will say that accurately predicting the number of unpaid interns in this country is extremely difficult. There are no accurate forecasts. To return to prosecutions, it is interesting to note that from a criminal perspective, we prosecute only those companies that are the most pernicious offenders, but that HMRC takes action on a civil basis through the civil courts. In 2016-17, 1,134 businesses were taken through civil proceedings and we clawed back nearly £11 million for 98,000 workers. That is progress, but I recognise there is much more we can be doing.

Baroness Vere of Norbiton: My Lords, as I have already mentioned, during the time that this legislation has been in place there have been 14 prosecutions and, as I said, those were for the most pernicious and serious cases. We tend to choose the civil route is so that people can get their funding much quicker. However, there is one other way in which we can ensure that employers step up to the plate and stop exploiting workers: only last week we named and shamed an additional 260 companies across the country that  are not doing right by their workers. I do not know  whether noble Lords have had a chance to look through their local media, but I have recently, and it is interesting to note how often local media pick up these stories and ensure that people in their local communities understand what their local companies are doing.

Lord Agnew of Oulton: My Lords, the pilots were delayed by the general election but will start next year. Delay has enabled the design to effectively address the problems identified by the noble Baroness, Lady Tyler, and the Education Select Committee. In particular, we have taken forward recommendations of the expert working group on the mental health of children in care which the Government commissioned to look at how to improve mental health and well-being support for looked-after children. We are currently identifying an organisation to support implementation.

Lord Agnew of Oulton: My Lords, we will work with our delivery partner to identify pilot sites, and there will be an up-front commitment to help meet any needs that are identified during the assessment process. One advantage of the delay is that we now have the mental health Green Paper, and we are trying to dovetail in as much of the work from that into these pilots as we can.

Lord Dubs: Will the Minister join me in congratulating Hammersmith council, which on Thursday took in to look after a Syrian refugee boy from Greece who has serious mental health needs? Is not it a good sign that a local authority is doing that and showing what can be done for vulnerable refugees with mental health needs?

Earl of Listowel: My Lords, I declare  my interests in the register in children’s mental  health. Can the Minister assure the House that the recommendations of the expert working group will be fully funded by the Government? In particular, will recommendations around children’s homes be fully funded? Children’s homes have the most damaged young people, who are placed there as a last measure,  yet their staff are still very poorly qualified. David Berridge, the eminent academic, commenting on the predation on children in homes in Rotherham said that we must start moving towards having higher qualified staff in children’s homes, given the complexity of their needs and their vulnerability to predation.

Lord Agnew of Oulton: I reassure the noble Lord that we will be looking at all the recommendations of the expert working group, some of which included the   points that he made. These include things such as establishing a virtual mental health lead, based on the success of the virtual school head process; and improving the strengths and difficulties questionnaires, which we discovered are not always being carried out as well as they should be. In the debate on 23 November last year, the noble Baroness made a point about the importance of assessing mental health at the same time as a young person’s general health assessment is carried out, so reducing stigmatisation. I hope this offers some reassurance to the noble Lord. It is quite right that he holds us to account, even in the Christmas period.

Lord Agnew of Oulton: My Lords, the pilots will be looking very much for the potential to join up with other government programmes that support mental health and well-being of looked-after children. This will include the scope to link with the Green Paper proposals, which I have mentioned, and other related work such as NHS England’s testing of personal mental health budgets for looked-after children. There will be an up-front commitment to try to meet any needs that are identified during this assessment process.

Baroness Williams of Trafford: My Lords, Border Force works closely with other law enforcement agencies, security services and international partners on an intelligence-led approach to identify unlawful maritime and aviation  activity. It also uses a combination of cutters, radar, onshore assets and aerial surveillance to detect and stop small craft.

Lord Foulkes of Cumnock: My Lords, I have been known in the past to express some concerns about this issue and, on this occasion, I want to make it absolutely clear that the Senior Deputy Speaker should be commended for the work that he has done. It has been a long and detailed exercise carried out withMy second point is in relation to committees. The more ignorant observers of this House seem to think that getting up, asking questions and making speeches in this place, as I tend to do from time to time, is the only important work that this House carries out. That is as far from the truth as one can get. This House carries out a huge amount of detailed, painstaking and important work in committees. Incidentally, I tried to get the producer of the three documentaries on the Lords to film some of them. I was told that it was too boring. It may be boring, but it is very important—some of it is not boring, by the way.
We should try to get this message over, especially on these Bills. My noble friend Lord Elder and others served on the high-speed rail Bill. He spent hours, days and weeks on it for almost no public recognition or, even more importantly, awareness of what he was doing. We need to take every opportunity—I know the Senior Deputy Speaker and the Lord Speaker will do this—to shout from the rafters and explain, when we go to schools and other institutions, that a great deal of work by this House is done outside this Chamber and is not fully recognised.

Baroness Jones of Whitchurch: My Lords, I am grateful to the Minister for his clarity in introducing this secondary legislation, and for discussing some of the issues arising from it in advance of today’s consideration. If I could take a small amount of credit for the fact that this SI is before us today, I think I was the first person to raise the issue of microbeads in your Lordships’ House several years ago. I can still remember the look of growing dismay on the faces of noble Lords in the Chamber, who realised for the first time that this plastic was not just an environmental issue, it was actually getting into the food chain and potentially contaminating their fish supper.
Since then, awareness of the dangers of microbeads has risen significantly and the more the public have become aware of them, the stronger the call for microbeads to be banned. The latest polling shows that some 85% of people want action to stop plastics polluting the oceans. As well as concerns being raised on a cross-party basis, both here and in the Commons, there have been some very effective campaigns by Greenpeace, the Marine Conservation Society and other NGOs. As has been said, the wonderful work of David Attenborough and the “Blue Planet” series has also helped to harden attitudes against the wider contamination of plastics in the sea.
It is also clear that microbeads and microplastics represent a particular challenge because apart from the health implications in the food chain, which, as has been said, are still being analysed, once those microbeads are washed into our oceans that is irreversible. It is hard to imagine how they can be cleaned up in the future, so we welcome this initiative by the Government in taking a first step to clean up our oceans by banning microbeads in cosmetics and toiletries. The evidence and science are there to back the initiative up, while it can be delivered without human detriment and with considerable public and business support.
It is fairly obvious that microbeads are not an essential ingredient in personal care products. We clearly managed without them in the past and, as has been  said, many companies are already using natural alternatives such as ground almonds or apricot kernels to replace microbeads. As the Minister said, there has already been a voluntary ban by a number of cosmetics producers, so this proposal will create a level playing field and consistency across business. There have also been successful initiatives to take action on microbeads in other countries, notably the US and France. However, as he said, the framing of this proposal in the UK will potentially deliver the widest ban in the world, incorporating both the manufacture and sale of goods with microbeads. We obviously welcome that status.
Having said all this, I would like to put a few questions to the Minister. First, these proposals cover only rinse-off personal care products, not products which remain on the skin. Can the Minister explain the differentiation between those two categories of toiletries and what further consideration is being given to a wider ban? Secondly, it has been suggested that microbeads in personal care products represent only one-fifth of total use, with the remainder used in industrial cleaning products. Can he clarify what the actual proportions are and what steps are being taken to find alternatives to microbeads in other sectors, so that a complete ban can be introduced? Thirdly, as the noble Baroness, Lady Bakewell, has just pointed out, the ban will be only as good as the enforcement measures put in place. The legislation envisages local authorities, specifically trading standards officers, enforcing the ban. What training and guidance will be given to these officers? Does the Minister think that they will have the resources to police the microbead ban, given the pressures already on the service and the cuts they have endured?
It seems that the real challenge will be in policing not the household names, many of which are already taking action, but the small niche companies and cosmetics imported from overseas. In this regard, the Commons Environmental Audit Committee drew specific attention to the problem of labelling. It is currently impossible to tell from packaging whether a product contains microbeads. If the ban is to be upheld by enforcement bodies, they will need greater clarity on what cosmetic products contain without having to resort to chemical analysis. Can the Minister clarify whether any further thought is being given to product labelling, which would help consumers and enforcement agencies alike? Finally, as he acknowledged, plastics in the oceans do not respect borders. A ban in this country will have a marginal effect unless other countries follow suit. What steps are the Government taking to persuade the EU and other global nations to take this issue seriously and follow our lead?
These reforms are welcome but we have to be realistic about what they will achieve. Microbeads are a small proportion of the microplastic problem and, literally, a drop in the ocean compared to the wider plastic contamination of them. I hope the Minister can reassure the House that this small beginning is a symbol of a larger determination by this Government to take a global lead in preventing further plastic pollution and clean up our oceans for the next generation.

Baroness Sugg: My Lords, these draft regulations establish Transport for the North as the first subnational transport body, making the north the first area in England with statutory influence over strategic transport investment decisions.
For a strong, prosperous and balanced UK economy, we need a northern powerhouse, and getting transport right is central to that idea. The aim is to improve transport to, from and within the north, boosting economic growth and rebalancing the economy. That is why we have set up Transport for the North, so the region can exercise real power and make its voice heard on how we can best invest in transport. Having such a body allows areas to combine their strengths and plan transport to grow their economy.
Establishing Transport for the North will formalise local input into strategic transport investment, allowing it to give advice on proposals that could boost growth and development to the North and improve the lives of millions of transport users. Creating Transport for the North permanently by statute will ensure that its impact and influence, and the transformational change that can result, will be felt for years to come.
The north is a region with enormous potential: over 15 million people; over 1 million businesses; exports upwards of £50 billion; thriving and regenerated major cities; and world-renowned universities. If it were a country, in economic terms it would be the 10th largest in Europe. Its vast potential remains undiminished, but it has the potential to be so much more, and the best way to unlock that potential is to invest in a world-class transport system that connects the great cities of the north.
To achieve this, the Government are already spending record amounts on transformational projects such as HS2 and the Great North Rail Project, new trains and extra services through improved franchises, and £3 billion on roads to make journeys faster and more reliable. As  important as investment is, though, the north also needs a long-term strategy to drive economic growth—a strategy developed by the north, for the north. Such a strategy will be the core function of Transport for the North, giving it more influence in national transport planning and ensuring that links between transport and economic development are maximised.
Transport for the North is already making a difference in many areas: Northern Powerhouse Rail, the development of smart ticketing and the pan-northern strategic transport plan, to name but a few. However, in order to drive sustainable and transformative change and take a genuinely long-term strategic view, it must have permanence and statutory status. This status gives Transport for the North the credibility and authority to allow it to plan, recruit, enter into contracts and spend effectively the £260 million that it has been allocated to take forward its work.
Over the last three years, both civic and business leaders have come together to forge an ambitious vision for the north. The Secretary of State responded to Transport for the North’s proposal setting out its role in March this year, and no fewer than 56 separate local authorities have provided official consent to this order. The role for Transport for the North set out in these regulations strikes a balance between what is right for the north and right for the country. The Government and our agencies are already working closely with Transport for the North on national infrastructure decisions and, as a formal partner with statutory status, this role will be strengthened and made permanent.
Speaking with a strong, unified voice will be fundamental to bringing our cities closer together and creating a modern, reliable and improved transport system in the north. I beg to move.

Lord Liddle: My Lords, I declare an interest as a member of Cumbria County Council and, more particularly, as a railwayman’s son from Carlisle. I, too, welcome the establishment of Transport for the North. I think it is excellent that we will now have a planning and co-ordinating body that will bring some coherence and, we hope, a transport strategy for the north.
I follow up what the noble Lord, Lord Shipley, said about resources. In repeating the Statement, the noble Baroness referred to a sum of £260 million for which Transport for the North would be responsible. What caught my eye in the recent Budget Statement was paragraph 4.53 on infrastructure delivery, which talks about the Infrastructure and Projects Authority setting out a 10-year projection of public and private investment in infrastructure in Britain of around £600 billion.
The interesting question is how much of this £600 billion will come under the purview of Transport for the North. I very much look forward to the noble Baroness being able to tell me in her reply. Mr Hammond promised some worthwhile things in the Budget. For instance, in the transforming cities fund, there was £243 million for Greater Manchester and £134 million for the Liverpool City Region. There was a £300 million fund for ensuring the links between HS2 and other infrastructure in both the north and the Midlands, but £300 million is not very much. Of course, there is the new rolling stock for the Metro—one of the finest achievements of my friend the noble Lord, Lord Rodgers, when he was Transport Secretary in the Callaghan Government.
We need more information. My county of Cumbria has vast unmet infrastructure needs. I have a letter here that I could read out about Cumbria’s requirements for road investment. I am conscious of the requirement for rail investment. The west coast main line has been modernised, but the coastal railway, which goes through some of the most beautiful country in England, up to Sellafield and then on to Carlisle, is back in the 19th century in its infrastructure. Yet we are talking about a new nuclear power station being built in west Cumbria and how we try to relieve traffic congestion in the Lake District. These questions need to be addressed, and they will all cost money.
I say just three things on money. First, in my view, London and the south-east should make a bigger contribution. They constitute one of the richest parts of Europe, and I would like the Mayor of London given power to raise more money through property taxation in London for infrastructure investment. Secondly, as long as you stick to the traditional cost-benefit analyses of how transport schemes are assessed, you will always end up with London and south-east projects at the top of the list. That is because there is not a broad enough conception of public value in how transport projects are assessed.
Thirdly, I do not want the Secretary of State for Transport telling us that he has no money in his budget, because that has been exposed as a total fallacy by his decision on the east coast franchise in the last few weeks. He has basically allowed Virgin and Stagecoach to run away with hundreds of millions of pounds that they owed on their franchise payments—possibly as high as £1.5 billion, I am told. He has allowed them to run away with that, because he was not prepared to go along to the House of Commons and admit that their franchise had failed. That is money that could have been spent on transport projects in the north of England; it has not been spent—and what is the explanation?

Lord Berkeley: My Lords, I welcome the fact that so many local authorities have got together and persuaded the Government to form this new organisation. As the Minister said, in geographical terms it is probably the 10th largest area of its kind in Europe. It goes from Newcastle down to Lincolnshire, right across to Cheshire and Liverpool and up to Cumbria; it is an enormous area, and it is a real success that they have managed to do this
The Minister said that it would be useful for the Department for Transport—I hope that I have got this right—to give advice. From Regulation 5, “General Functions”, it seems to me that Transport for the North will be giving advice to the Secretary of State. It says that among its general functions is,
“to prepare a transport strategy”—
yes. Then it refers to providing advice to the Secretary of State about how he should exercise his transport functions. Thirdly, it has the function,
“to co-ordinate the carrying out of transport functions”.
Fourthly, it says that it must tell the Secretary of State if it thinks that TfN can do it better. To me, that is very much the Secretary of State retaining control. Perhaps the Minister could explain where the devolution is in all this. It is nice having lots of advice, and everything, but the devolution does not seem to be there; it is still going to be the Secretary of State who has the control.
Other noble Lords have mentioned money. The £250 million that the Minister mentioned is really pretty derisory, compared with Crossrail 2, which I believe will cost £30 billion and HS2, which I think will cost £100 billion, which, of course, connects to the north. But I suspect that many people in that enormous area, as other noble Lords have said, would like to be better connected within the area rather than getting to London 10 minutes quicker. So there is a real mismatch between what London is getting and what the north needs to get. I hope that the Minister can put me right on both those issues. Is it real devolution? Can Transport for the North really make decisions and have the money to spend it as it wants?
Last week, in a local newspaper in Bolton, Lancashire, a comment was made that the Secretary of State had refused the Mayor of Manchester—and this may also be the case regarding other big stations in the north—control of the station so that they can do it up and make it more attractive, getting more passengers and more retail. Why does London have to control the colour of the paint, or what is done locally in these  stations, if the local people want to do it and can  make some money? We really have to let go of London having control of everything and let this new organisation have real powers. If it fails, the Government know what to do, but I think that it will be a great success.

Lord Rosser: I thank the Minister for her explanation of the purpose and content of these regulations. I note that the Chamber is fairly full, but I am not sure it is because noble Lords have come to listen to either myself or, I am afraid, the Minister; I suspect that they are here for the next item.
Transport for the North was established in 2014 as a partnership of northern authorities and local enterprise partnerships to formalise co-operation on transport issues in the north, working with Highways England, Network Rail, HS2 Ltd and the Department for Transport. TfN will, under these regulations, become the first subnational transport body in England. Transport for the North’s responsibility is to set out the requirements of the transport network through a strategic transport plan for the north, and it has a remit to focus on movement between cities and key economic centres to support a more productive and integrated northern economy. Indeed, the Northern Powerhouse Independent Economic Review found that, if the north receives the right level of investment to improve connectivity across the region, it will create over 850,000 jobs and add  almost £100 billion gross value added to the economy by 2050. Transport for the North also has a role to play in supporting local and national government to ensure that local investment in public transport and national transport infrastructure projects form a coherent investment programme.
We support putting Transport for the North on a statutory footing from April next year, but we doubt whether what is now being put forward is adequate in addressing underinvestment and the significant disparities in transport spending between the north and the  south. Following the debacle over the cancellation or postponement of rail electrification on the trans-Pennine route, the Secretary of State asserted that the future of transport in the north was in the hands of the north because he would give it the powers necessary to address its own transport needs. What the Government are now proposing for Transport for the North would not appear to deliver what they said would be delivered.
All the regions of the north combined receive less in transport investment than London, despite the north having twice the population. If the Government will not address poor transport infrastructure in the region, they should at least give the regions of the north the power to do so themselves. However, the regulations we are discussing today would appear to give the north neither the necessary investment nor the necessary power in this area. It would appear that, instead of receiving “client status”, Transport for the North will instead be a “statutory influencer”. Although the Secretary of State will have to have regard to the views and recommendations of Transport for the North and its statutory transport strategy, it will, as I understand it, be a matter for him to decide what improvements to the transport infrastructure will get the go-ahead, and when, since Transport for the North has no decision-making powers in that regard and neither will it have either its own, or access to, financial resources to be able to finance and deliver significant infrastructure schemes.
There is a real danger that Transport for the North will spend a lot of time, enthusiasm and energy drawing up a strong economic case for significant transport infrastructure improvements, with the support and backing of local authorities, business and community organisations and representatives across the region, and then find that the Secretary of State just kicks them into the long grass, perhaps because this Secretary of State, the most politically partisan we have had for a long time, is reluctant to give money or additional decision-making powers to areas that do not share his political outlook—as opposed to effectively giving money to failing east coast main line franchise operators.
Perhaps that is why he has not delivered on his earlier statements that the future of transport in the north was in the north’s hands and that he would give it the powers necessary to address its own transport needs. If Transport for the North does not get the support of the Secretary of State for implementing and overseeing the delivery of its transport recommendations, it will lead to frustration all round rather than progress, since people have had enough of talking shops and want to see imaginative and well-thought-through plans see the light of day.
Could the Minister say what amount of money is available for implementing and delivering Transport for the North’s strategic transport plan—and whether, if TfN had already been in existence as a statutory body and had included the electrification of the trans-Pennine route in its strategic plan, the Secretary of State could nevertheless have disregarded the plan and not agreed to electrification of the route? Hence our view, if I am correct, that Transport for the North does not have any great power; the power remains firmly in the grip of the Secretary of State.
Could the Minister also say what it means in reality for the Secretary of State to “have regard to” TfN’s statutory transport strategy when developing national transport strategies and plans? How does the Secretary of State prove that he has had regard to that strategy—and, alternatively, how does anyone prove that he has not? Would it be open to Transport for the North to take legal proceedings against the Secretary of State  if it considered that he had not had regard to its transport strategy—and, if so, will TfN have the statutory  power and the financial resources to initiate such legal proceedings?
As I understand it, Transport for the North will also have a role in the co-ordination of regional transport activities, such as, for example, smart ticketing and co-management of the TransPennine Express and northern rail franchises through the acquisition of Rail North Ltd. What exactly will that co-management involve as far as Transport for the North is concerned, what exactly will co-ordination of regional transport activities involve, and what statutory powers is Transport for the North being given in respect of each role?
What will be Transport for the North’s budget for its administration over each of the first three years from 1 April 2018, how many staff will it employ, how much will it receive in grants—the Minister mentioned £260 million—and from what sources and what purposes over that same three-year period? In how many years’ time do the Government anticipate reviewing the role of Transport for the North as a statutory body, including the effectiveness with which it is able to carry out its role under the powers that it is being given through this instrument, and whether there is a need to either reduce or increase the powers and the role that Transport for the North is being given under these regulations?
I believe that the Minister, when she introduced the order, referred to Transport for the North achieving “transformational change”. What goals are the Government seeking to achieve over the next 10 years that will represent the transformational change referred to by the Minister?
On the resources made available to Transport for the North, I repeat that I think the Minister mentioned £260 million. To most of us that sounds like an awful lot of money, but can the Minister say how that compares with the cost of Crossrail for London, for example, so that we can see how significant a part of the cost of Crossrail that £260 million represents?
We hope that Transport for the North will be able to exert a positive influence on transport in the north and that it does not become a largely toothless, penniless, powerless talking shop, drawing up persuasive and compelling strategic plans which are then largely ignored by the Secretary of State.

Lord Newby: My Lords, it is the time for end-of-term reports, and this Statement represents that of the Government in respect of Brexit. Like the assiduous student that she was, the Prime Minister has carefully presented her course work. She has one agreement to show for almost nine months of negotiations since the triggering of Article 50. It is in three parts. The Government have agreed to honour their financial commitments—good, but this was merely bowing to the inevitable. They have agreed to allow EU migrants to stay in the EU—good, but this principle was never seriously in contention. It has kicked the Northern  Ireland problem down the road—bad, but given the fundamental incompatibility contained in the Government’s position, this is an inevitable delay until or unless the Government work out what they want their trading relationship with the EU to be.
In terms of legislation, we are to have at least eight Brexit Bills and 1,000 statutory instruments before March 2019, and in reality many of these will be needed well before then. Yet not a single piece of primary legislation, far less a single statutory instrument, has been enacted and no Brexit-related Bill has even completed its passage through a single House. It is extremely difficult to see how the Government plan to get all this legislation through in a timely manner, but given the importance of the subject matter, can the Leader of the House give us an assurance that the Government will produce their proposals in time for both Houses to deal with them properly and within the normal conventions on timetabling?
As far as the future trading relationship is concerned, and indeed on a host of other issues, including the Government’s attitude to ongoing migration to and from the EU, it is pointless pressing the Leader on the Government’s attitude because they literally have no policy. Can she, however, confirm that last week’s agreement means that Northern Ireland citizens who retain their EU citizenship will have more rights than other UK citizens? If, as I believe, this is so, it will be deeply offensive to many people. Given that the noble Lord, Lord Callanan, said to your Lordships’ House last Monday that,
“we are not ruling out”—[Official Report, 11/12/17; col. 1368.]
UK nationals retaining EU citizenship, will the Government now positively propose to the EU that UK citizens will be able to retain their EU citizenship so that the majority of us are not reduced to second-class status in comparison with our Northern Ireland compatriots? Given that when the Government do eventually adopt a policy on our future trading relationship with the EU this will be of fundamental importance to the Brexit negotiations, and indeed the country’s position going forward, will the Leader of the House give an assurance that both Houses of Parliament will be able to have a full debate and vote on the Government’s proposals before they are transmitted to the EU? Would not anything less be inconsistent with Parliament taking back control?
In order that people at large might have a clearer understanding of the consequences of Brexit for the economy, will the Leader now seek to persuade the Prime Minister and the Brexit Secretary to publish  the infamous sectoral reports? They contain nothing which is commercially sensitive or could jeopardise our negotiating position and there is no reason why everyone should not be able to see them. The current arrangements for parliamentarians to see them are disproportionately restrictive and should in any event be relaxed, but the documents should simply become publicly available. The only conclusion one can draw from the Government’s current approach is that they do not want people to see how complicated Brexit will be in practice or to understand the depth and beneficial nature of our current economic relationships with  the EU.
Finally, will the noble Baroness confirm the estimate in today’s Financial Times that Brexit is already costing, not benefiting, the UK some £340 million a week, as a result of lower growth which has flowed from the referendum result? It is very tempting at this stage of the term to give the Government an overall mark for their term’s work, but I fear that that would be embarrassing. I simply pose the question asked by many a frustrated and disappointed supervisor: “Don’t you think it would be better if you took another course?”.

Bishop of Leeds: My Lords, the Leader seems disappointed that the Statement has not been welcomed as it might have been. I do welcome it but I do not think it is as it has been portrayed; that is, the progress that has been made thus far is simply the opening gambit and the real hard work is going to come in the next phase. It seems to me that so far not a great deal has been achieved, except that we can go on to talk about the next phase. I will make a quick observation and then put a question.
I have some knowledge of Russia. It seems that Russia does not need to defeat the West because it gets the West to defeat itself; the Russian policy seems to be to destabilise, and Brexit and the way it is being conducted actually feeds that agenda. We do not talk about that enough. If you look at the rise of the far right, such as what has gone on in Austria, the very strong links with Russia are there. This is not simply about Ukraine.
I would be much happier if I heard the word “might” rather than “will”. We talk about how we “will” get the best deal. By definition, we will get the  best deal because it will be the only one that we come up with so it will be the best, but that is not the same as saying that it will be the best deal that we could have got or the best for this nation. Would it not be better for the Government to get away from thinking that if you make assertions, that creates reality, and to be more honest with the British people by saying we “might” get, rather than we “will”, when it might not be in our power to achieve the “will”?

Baroness Evans of Bowes Park: As I have said, our objective is for access toeach other’s markets to continue on current terms, based on the existing structure of   EU rules and regulations. The framework will mean that we will start off under the CJEU and will be under it for part of the period. But the Prime Minister has always said that if we can agree provisions that will be part of the future relationship, such as a dispute resolution mechanism, we will aim to bring them forward at an earlier stage.

Lord Bourne of Aberystwyth: I thank the noble Lords, Lord Kennedy and Lord Stunell, for their response and their general support for moving things forward. I will try to deal with the detailed points that they raised. First, I join with them in saying, as I have on previous occasions, that we owe a massive debt to members of the public sector, particularly the emergency services. We also owe a massive debt to charities, the faith sector and to the great British public, who have, as has been said, responded with incredible generosity to this dreadful tragedy.
In relation to rehousing, as I made clear in the Statement, we have felt that the local authority was slow off the mark. That said, it would be ungenerous to say that progress has not been made. There is still a massive amount to do: we must be clear about that. We cannot be complacent. But we are in the position now of having more houses than there are families needing to be rehoused, so the issue now is that not every family is happy with the house or property they have been offered. We have always said—and we have had support from other parties and others—that this is the right approach and that we should not be forcing people to move where they are not happy to go. We do not want to do that. There may be many understandable reasons why people will not want to move into a tower block or, possibly, even into third or fourth-floor accommodation. They may not want to be in the area concerned. Some people have changed their minds. There are many factors here. Progress is being made, but there is more to do. I readily accept that.
On the point raised by the noble Lord, Lord Kennedy, on charities, the distribution of charitable funds is a matter for the charities concerned. Obviously, we will provide scrutiny and guardianship to ensure the proper processes are being followed, as we always do. No doubt the final allocation will follow, but that is a matter for the charities, unless they seek help and guidance. That would then be given as a matter of due process.
Both noble Lords referred to the memorial event held here, in addition to the service at St Paul’s, and the views of survivors. Many survivors made the point about the site and how it should be developed. We have made clear—I think the Statement makes it clear again—that that is a matter for the survivors. They are in the driving seat on this. They may well seek advice and guidance from us, but they have a veto on that. The right honourable Member for, I think, Ruislip, who is the Minister for Grenfell survivors, is working with the community on the principles that will be applied, but, as we made clear, they are in the  driving seat.
The noble Lord, Lord Kennedy, referred to Sir Martin Moore-Bick and offered his support and that of his party, for which we are very grateful. I think that is the position of the Liberal Democrats as well. Sir Martin is considering whether to have a consultative panel. That is a matter for him. It will no doubt be a matter that the Prime Minister will wish to take into account on whether she has somebody else sitting alongside Sir Martin Moore-Bick. It is a question of balancing those considerations.
The noble Lord then referred to—I think this was a matter on which the noble Lord, Lord Stunell, homed in—the interim report from Dame Judith Hackitt. Again, I thank both noble Lords for their support for this process. We thought it very important that we set this up alongside the inquiry. We have had a very detailed interim report, which we will want to respond to and look at in detail. As I said in the Statement, the Government accept all the recommendations directed to them. We will certainly be carrying those out. Above all, we will be putting safety first. That is something the British public, the people of Grenfell, obviously, the wider community, the Government and all noble Lords would expect us to do. Again, safety first applies in relation to regulation. There is nothing to stop us proceeding as necessary with any regulations and whatever is necessary coming from the interim report and, later, the full report, which we anticipate in the spring.
Both noble Lords raised issues about cladding. The noble Lord, Lord Kennedy, asked about the financial position, as did the noble Lord, Lord Stunell. We are in discussions with 26 local authorities that have sought help. We have asked for further information from 10, from memory; I will confirm these figures, but I think it is 10. We are having detailed discussions with two further—maybe two of 10. I will confirm that in writing to the noble Lord—I leave a copy in the Library and copy it to other noble Lords who have participated in the debate—making it very clear that we will not let financial means stop what is necessary to move this forward. That is, I think, widely accepted.
Once again, we have received an excellent report from Dame Judith Hackitt. There are many facets to it, not just directed to government, although a lot of it was. We encourage all relevant parties to look at this excellent report, study it and respond in a positive way to it.

Lord Bourne of Aberystwyth: My Lords, I thank the noble Baroness, Lady Donaghy. As we have indicated all along, it is important that any relevant organisation or local authority that is concerned about their funding position should contact the Government. As I say,  24 have done so; we are looking in detail of the position of 10 of those and we have asked for further information from two. That remains the situation. It would be very dangerous for me to say that it will cover this and it will not cover that. It has to be a bit more flexible, because the sort of work that is necessary will vary enormously from block to block and from authority to authority. Of course, there will be an established position of the sorts of area we will look at and the sorts of financial assistance that may be necessary, but I repeat that we are certainly open to looking at those bodies that need assistance and discussing it with them. That is what is happening and I urge  local authorities, through Members here, as well as other housing associations and so on, to contact us if they need clarity. We will be very happy to provide that.

Viscount Brookeborough: My Lords, I add my thanks to the noble Baroness, Lady Tyler, for her excellent leadership of our committee and for the staff who supported her.
We sometimes think that financial exclusion is important but that it is a subject like many others. It is not. It is really important, as important as the security of our population or their health and education. Why? Because it concerns every individual in the country —not that they are all excluded but because of their financial capability.
Perhaps it is easier to define financial capability, which is what we are trying to get. The MFO, the Microfinance Opportunities, defined it thus:
“Financial capability is the combination of attitude, knowledge, skills, and self-efficacy needed to make and exercise money management decisions that best fit the circumstances of one’s life, within an enabling environment”.
Not everybody needs to know how to invest in the City of London; we all have our own worlds that we need to know more about.
The Government have made some minor advances and were in a constructive mood during debate on the Financial Guidance and Claims Bill. I am sorry that they were perhaps not so constructive in their response to us, which has not been very positive. They sometimes seem to support our view but do not quite go the whole way into implementing recommendations.
I turn to financial education or, better put, the teaching of financial capability. The MFO defines it as:
“Financial education equips people with knowledge and skills, and strengthens their attitudes and belief in themselves to make and exercise informed, confident and timely money management decisions”,
in their own lives. So it is a lot more than just facts and figures; it is about people’s social belief and their belief in themselves that they can do things.
When we look at the statistics, one or two of which we have heard, we see that one in six struggle to read a simple bank statement, 17 million cannot manage their own budget and only 26% of postgraduates are happy that they can manage their own money. To put it another way, that means that 74% of our most highly educated people in this country do not believe that they are capable of managing their own budget or that they have had the training to do so. It is not surprising that we have a problem.
The FCA’s Financial Lives Survey 2017 backs up everything we say. It is all there. In the past few days, the Education Policy Institute has indicated that in mathematics,
“England has one of the largest gaps between the highest and lowest performing”,
out of all developed nations. I am very glad to say that England does not include Northern Ireland because we come out higher than that.
If you look at the Daily Mail—which I do because it is in the Library, although some may say you should not—its headline today is “Middle Class Pension Crisis”. Three paragraphs down it says:
“The Department for Work and Pensions says”—
so it is not me and it is not even the Daily Mail—
“12 million people are not saving enough – despite more than half of them earning at least £34,500 a year”.
So we are not talking just about those on the minimum wage; we are talking about graduates, well-educated people who have gone into jobs, and there they are.
At the bottom of all this must be financial education, or lack of it. It has to be. We recommended more financial education in school. The noble Lord, Lord Patten, who sat next to me, said that he was not sure that schools could actually do all that. However, it is not me who is saying it; it is the Government who, in  response to our questions, are going to justify what they are doing. They will, we can be sure, be quite good at batting it away.
However, the Government had every chance in the Financial Guidance and Claims Bill to put in schools. In relation to the single financial guidance body, Clause 3(9) sets out:
“The strategic function is to develop and co-ordinate a national strategy to improve … the provision of financial education to children and young people”.
There was an amendment to put schools into that. First, I must ask the Minister why they did not allow schools to go into that. Secondly, as they did not allow schools to go into it, where does he believe that financial education is going to take place? Is it going to take place over the weekend when people are going to cinemas? Is it going to take place after hours when they are doing other things? Who is going to do this financial education that they talk about and where? Therefore, why did they not allow schools to go  into it?
On one or two of the recommendations and on recommendation 6, which is all about education, the Government tell us that there is a new mathematics curriculum. As I have just said, the institute of whatever it was definitely does not believe that has had much result and, after all, mathematics must be at the very bottom of financial capability—if you cannot add two and two, you are not going to able to do any of the rest.
The Minister may go to paragraph 5.13 of the Government’s response and say:
“In 2014, for the first time, financial literacy was made statutory”.
We have heard that only 35% of schools come under this curriculum guidance. The response then goes on to justify the Government’s position:
“A number of schools also include the teaching of financial education in their Personal, Social, Health and Economic Education … provision”.
In my speech during the debate on this during the passage of the Bill, I said:
“Financial education lies within PSHE subjects but they are not statutory … Time devoted to PSHE has been reduced by 32% since 2011 because it is non-statutory”.
When people were asked why there was so little time for it, the answer was:
“We only have 20 minutes, and if we don’t do something on sexual exploitation or online safety”,—[Official Report, 24/10/17; col. 914.]
so they cannot do it.
The next thing that the Minister will probably say is that Ofsted really covers all this and is pretty good at it. The Government’s response states:
“Inspectors also look for evidence that, where relevant, English, mathematics and other skills necessary for pupils to function as economically active members of British society”.
However, this is what I said about Ofsted:
“Adrian Lyons said that Ofsted produces a state-of-the-nation education report. Our chairman, the noble Baroness, Lady Tyler, asked … ‘how much was there on financial education in the last one?’ … Mr Lyons’s answer was: …‘I do not know the answer to that, but I would be surprised if there was any, to be honest’”.—[Official Report, 24/10/17; col. 914.]
Ofsted says that it finds it difficult to mark things unless it has marks and there are investigations into it, but it only has to give extra marks if this subject is covered.
I seriously believe that the Government are not coping with this in education. The figures and statistics are outrageous for a country as developed as ours. Quite frankly, the reasons given in the response to our recommendations are simply very inadequate and wishy-washy, and they wander around without getting to the point.

Lord Whitty: My Lords, I commend to your Lordships this report by Sub-Committee G. I thank the members of the sub-committee—many of them have put their names down to speak today—for their important contributions, and I also thank the staff of the committee and our specialist adviser, Dr Ingo Borchert.
I want to make three preliminary points. The first concerns the elapsing of time. The inquiry was conducted between October 2016 and January 2017, over a year ago, and our report was published on 22 March, which was still before the Government triggered Article 50. Much water has therefore passed under the bridge since publication. Regrettably, much of that water is almost as murky today as it was then in terms of the kind of free trade agreement that the Government are really after and how services fit in with that approach. The negotiations have had their ups and downs, and the Government have produced a number of future partnership papers on the UK’s relationship with the EU, but regrettably, up until today, no response to our report has been forthcoming from the Government.
It was delayed at first by the general election and subsequently by the Government’s insistence that they cannot provide us with a response until all their position papers have been published. I had a gracious response from the noble Lord’s predecessor but that was some months ago. I take this opportunity to express my disappointment at this and to emphasise the Government’s responsibility to engage with such reports and the findings of Select Committees. Therefore, I look forward to the Minister giving his detailed response later this evening.
My second preliminary point concerns the vital importance of these key services. As we know, the UK is very much a service-driven economy, and in these services the EU is an important trading partner. We export in aggregate to the EU and worldwide more than does the financial services sector and two-thirds  the amount of the goods sector, and we have a surplus in most of the areas covered by the report. We emphasise the complexity of trade in services, which admittedly is largely unaffected by tariffs but can be substantially restricted by non-tariff barriers.
Our report tries to examine what a bold and ambitious free trade agreement between the UK and the EU would look like and what it would need to include to represent a good deal for these non-financial services. We also look at the implications of trading in services under WTO rules—the so-called no-deal scenario.
My third preliminary point was the inadequacy of the statistics on these services. I was quite keen to spell this out but, interesting though it is, in view of the lateness of the hour I will instead refer noble Lords to chapter 2 of the report, which addresses that complexity.
As I said, trade in services does not generally attract tariffs, but trade is very much restricted by various forms of non-tariff barriers, some cultural but, in the main, resulting from divergent regulatory systems. Within the EU, the single market in services has not developed nearly as completely as the single market in goods. Nevertheless, significant progress has been made in developing common regulatory frameworks and structures and often specific consumer protection provisions for the various sectors, such as those in aviation, transport and travel, audio-visual and broadcasting, and telecommunications. In many of these areas the frameworks are overseen by EU agencies, such as the European Air Safety Agency. In most of these agencies, of which there are 34 in total, the EU has historically been a very influential member as well as a major beneficiary.
There are also some general provisions in EU regulations and directives that facilitate trade in services, such as the mutual recognition of qualifications, various intellectual property provisions, provisions on the free flow of data, and general data protection and consumer protection. There are also programmes that facilitate university students’ teaching and research. In many of these sectors, there is the free movement of often highly skilled labour.
It has to be said that at the point we received written and oral evidence, almost all representatives of the services we covered were relatively satisfied with the present or prospective EU situation affecting their sectors and the degree of influence and reflection of their interests they felt they had in these European institutions. Most were keen for the EU single market to move rapidly in the services sector and were encouraging the Commission and member states to move faster. They were particularly keen on developing a real single digital market.
At that time, most sectors were also confident that a separate bespoke sectoral agreement might need to be made in their areas to preserve the benefits of the single market. They saw a mutual UK-EU benefit in continuing the existing relationships. I will come back to the issue of separate sectoral agreements. Of course, this could have been agreed if we had moved towards the option of rejoining EFTA and the EEA, but that had already been ruled out by the Government; hence we did not consider it in detail but focused on a comprehensive free trade agreement.
I will make a few specific comments on some of the main exporting sectors, beginning with the professional business services, such as legal, accountancy, medical, engineering, business consultancy services and so on. These represent the UK’s largest services exports, generating a £30 billion global surplus and a £6 billion EU surplus. To support this sector, a free trade agreement would need to include provisions on the mutual recognition of professional qualifications and regulatory structures. It will also be important for UK businesses to retain the right to establish themselves in the EU, and of course vice versa, and to move staff easily across borders to service European clients and contracts at short notice. For these sectors, a no-deal scenario would result in increased, and in some cases absolute, barriers to trade with the EU. That would be particularly so for regulated businesses such as legal and accounting firms. In such a scenario we conclude that businesses would be likely to have to relocate or move substantial resources to the EU, incorporating separately, which would impact the UK’s trade balance, tax revenues and employment.
Digital services represent an important and growing sector of UK trade, which created jobs at almost three times the rate of the rest of the UK economy in the first half of this decade. To maintain the UK’s leading position in this field, a lot of our witnesses highlighted data transfers and access to skills as their most pressing concerns. Some adequacy decision from the Commission on the UK’s data protection standard would be needed to maintain the flow of data between the EU and the UK under a free trade agreement and it would be important to ensure that future changes in domestic law do not jeopardise regulatory equivalence in this field. On the other hand, a no-deal scenario would represent a regulatory cliff-edge for UK digital businesses and many may choose to relocate or redirect part of their activities to the EU.
The UK is also a world leader in creative services from music to fashion and design, representing a global hub in which companies from different parts of the creative sector cluster in the UK. To sustain that status, a comprehensive free trade agreement would be needed to ensure protection of intellectual property rights, market access and the mutual recognition of broadcasting licences, for example. Again, the contrast between a free trade agreement and a no-deal option was stark. Alternative conventions and treaties do not account for technological developments such as on-demand services, and so are not really viable options for trade. Audio-visual media services are also excluded from the EU’s schedule of commitments at the WTO, meaning that EU member states would be free to impose discriminatory provisions on the UK in the event of there being no deal.
We also considered aviation services. Witnesses told us that the strength of the UK’s aviation sector and shared interests with the EU offer important leverage for the Government to negotiate a good deal for UK air services after Brexit, either through continued membership of ECAA and EASA, the safety agency, or a bilateral air services agreement with the EU. Our report recommends that the Government should urgently clarify which of those two options they will seek. As  air services are excluded from the WTO provisions and the validity of pre-existing bilateral agreements is frankly uncertain, there is no viable fallback position under a no-deal scenario for aviation. We also emphasised the importance of clarifying the UK’s position with regard to EU-third country aviation agreements and of securing transitional arrangements if the UK has in the event to negotiate new bilateral agreements with these markets.
Last month, we held a follow-up session with witnesses from the aviation sector. They were still confident that the UK and the EU would be able to strike a deal on air services due to the sector’s fundamental importance to both parties and restated the view that this should be negotiated and agreed separately from any wider UK-EU free trade agreement. Incidentally, we intend to hold similar follow-up sessions with other service sectors.
Chapter 8 of our report looked at the UK trade in travel services and tourism, highlighting the importance of UK tourism to some EU member states as well as its social importance to families and businesses in the UK. Incidentally, tourism is the one sector in our analysis where we are in substantial trade deficit with the EU, largely because of the balance of tourist journeys. UK visitors unaccountably prefer the Med compared with EU tourists to British climes for most of the year. Again, our own tourism industry is doing reasonably well. As we have seen from the tourists around here, we are still dependent on EU tourists freely coming to London and other parts of Britain to spend their money and appreciate our culture, business and economy.
Throughout our inquiry, our witnesses told us that the UK is a global leader in these services and that the Government had already engaged extensively with the sectors to inform their position in negotiations with the EU. We applaud that on behalf of the Government. However, it has not been clear, either then or since, quite how the Government would respond to the points raised with them by the sectors. We start from a position of harmonisation, which ought to help us provide the foundation for an ambitious partnership for future UK-EU trade services. However, it is clear that to protect our service sectors the UK’s future partnership will need not only to be ambitious, but to deliver the most competitive services free trade agreement the EU has ever agreed. Reduced EU market access or failure to secure a free trade agreement at all would risk significant changes to the sectors, which would face increased regulatory complexity and some businesses would need to restructure or relocate their operations.
The Government also need to recognise the alarm raised by many of these businesses at the abandonment of the free movement of people. A relatively high number of EU nationals work in all these sectors, from the brightest and best in tech and professional sectors to the mobile labour in some areas of tourism. Put delicately, this dimension needs to be taken on board as the Government move away from freedom of movement to new forms of migration controls. Our report also calls on the Government to prioritise agreement of transitional trade arrangements to avoid a regulatory cliff edge and to reduce uncertainty. I hope that such an agreement on transition is now in sight.
It seems that the Government’s negotiations now face a dilemma, which was clearly spelled out in the news bulletins this very morning. All these sectors want to continue and to develop the kind of regulatory trading structures they currently have access to, with minimal change to trading arrangements, standards, the regulatory framework, and technical and regulatory agencies. They want bespoke chapters or separate deals in any free trade agreement to achieve that. But while David Davis may advocate Canada plus plus plus, neither CETA—the Canadian agreement—nor the South Korean and Japanese deals, which are very extensive deals with the EU, cover anything like bespoke provisions on which we can build. Of course, Michel Barnier says that we cannot cherry pick or have bespoke deals. There is not only no template; we do not have a mutuality of approach.
In preparation for this debate, I flicked through the 450 pages, excluding annexes, of the Canada agreement. While there are some particular provisions on services, such as telecommunications, and some general issues, such as intellectual property, are covered, there is very little on services and it is very thin. However, as I have said and as I have no doubt the Minister will emphasise, we start from near regulatory equivalence with industries that largely want to keep it that way.
I am about to conclude. Most of the points we made in the report, almost a year ago, remain valid. Real trade talks are about to begin in earnest. The Government need to take on board those points from us and from these dynamic sectors, as well as those from more obvious and traditional voices approaching the Government from the City, the manufacturing sectors and areas such as agriculture. It is vital that these key growth service sectors, replete with innovation and creativity, are not sacrificed in the inevitable trade-offs with other issues that will arise once the complex trade negotiations begin. I hope this morning’s Cabinet Brexit committee will at last have addressed some of these issues and be clearer on the outlined free trade agreement that we are trying to achieve. I look forward to whatever the Minister may be able to tell us about those developments and his comments on the report. I beg to move.

Lord German: My Lords, I too add my thanks and say how much I have enjoyed serving under the chairmanship of the noble Lord, Lord Whitty, on this report. I thank him for his perseverance in bringing it to your Lordships’ House today. I took the opportunity of going into the Printed Paper Office just before the debate began, on the off chance that I might find the Government’s response to the report before us, but I regret to say that no such response was on the table. It is therefore incumbent on the Minister tonight to give us some very detailed answers to the questions raised by the report. I notice that he is smiling, so I look forward to those responses later.
As the noble Lord, Lord Green, said, we are in the area of Canada-plus-plus-plus. I do not think there is any definition of how many pluses you can have, although I wonder how many pluses on the end would make up the equivalent of the single market. That is the direction in which I sense the sector, and this report, drives us. At the moment, we know virtually nothing of the Government’s position and what they want to see for the country. We have no overall comprehensive impact assessment; we therefore have no knowledge of the potential impact on jobs, the economy or society as a whole. This report provides some of the evidence that we need to make that judgment.
WTO rules are not altogether helpful to the service industries, which tells me that in the upcoming negotiations the UK will, as a minimum, require a comprehensive free trade agreement. Even then, it will not be as good a deal as the one we currently have inside the EU. I believe that services will be the trickiest part of the negotiations. Some 80% of the UK economy is service-based, yet less than one-third of all the free trade agreements signed by the EU with third countries have a services component, and generally those components are not adequate and suitable for the UK’s needs.
We need a transition period, as pointed out in the earlier Brexit and trade report from our committee. That will be essential to complete this work. Service sector exports in both financial and non-financial businesses have been growing and the three key non-financial sectors—business services, digital, and creative—provide a positive trade balance for the UK. All three are growing, and in all three our exports outstrip our imports.
However, the uncertainty created by the Government’s inability to express their desired outcome position is particularly acute for the services sectors because it  is here that reputational risk—the reputation of the UK as a provider—places a disproportionate burden  on this valuable part of our economy more than any other. It is the UK’s outward-facing, bold, and innovative qualities as a nation which spur the growth of these sectors. Continuing uncertainty taints that image.
This report lays out clearly the challenges that face the Government in ensuring that this very significant part of our economy continues to flourish. Mutual recognition of qualifications, rights of establishment, the free flow of data and intellectual property protection are just a few of the crucial issues where detailed agreement will be essential to maintain the UK interest, and in these sectors the free movement of workers and service providers is critical. All would be fine if we remained in the single market. However, in the interim, I would like to outline some of the challenges that the Government face by using one of the key service sectors, and I make no apologies for choosing the music sector. It has lobbied all noble Lords on the committee, but it has also been very vigorous since  the referendum in putting its case forward.
The revenues of the recorded music industry were, for example, higher than the combined revenues of the top 50 fasting-growing UK tech companies in 2014. The UK music industry generates £2.5 billion in exports annually. Music tours around Europe are a very important part of that long-term income. The music industry needs the freedom to trade and to break into and develop new markets. I know that noble Lords are familiar with the size of touring music events—it is rather like watching the credits at the end of a film  as the names roll on and on. These are people who  you may not be familiar with and whose names are unrecognised: riggers, electricians, sound engineers, digital engineers, painters, make-up, wardrobe, stage managers, visual effect teams, merchandisers and many more. The skilled engineers in the teams have accreditation which is recognised throughout the EU, so any change to that regime would affect the ability of UK tour operations companies to work with the speed and agility that permits night-to-night concerts in different major locations across Europe. Any restriction on movement across Europe could also result in temporary customs documents being needed. That would mean detailing every piece of equipment and merchandise, which would lead to delays at borders and increases in costs and time. Non-EU nationals performing or working on a tour would have to provide themselves with temporary work permits, as they do in France now if they come from a third country.
Copyright and intellectual property issues enable creators such as composers, songwriters and lyricists to derive a financial return for their work. Ten per cent of those who work in the UK music industry hold another EU country’s passport. The need to source a skilled workforce is critical to the success of the industry, so frictionless movement of talent is essential.
In passing, I must say how sad I am at the departure of the European Youth Orchestra to Italy from its  UK headquarters in London, where it has been since its foundation in 1976. The orchestra has about  120 players every year, aged between 17 and 24. It now appears unlikely that British players will be eligible in  future years.
That is just one example from one sector, but it outlines the most difficult of the issues that are before us. These are the issues that I started with—the challenges that the Government must satisfy. The committee’s report points that out. There is a powerful link between trading services and the cross-border movement of persons. Intellectual property requires protection. Without agreement and safeguards this vital part of our economy will be under threat. This cannot be just about the survival of the services sector; surely it must also be about its ability to flourish.
In the absence of the Government’s document responding to this report, what is their view on the free movement of workers across borders, on protecting intellectual property, on the mutual recognition of qualifications and deviation from those regulations, and on maintaining the free flow of data? Tonight is the Government’s chance to indicate how they will deal with these issues and provide the confidence that we all need to ensure that the UK’s service industries can grow and flourish.

Bishop of Leeds: My Lords, I am no expert on the technical elements of trade in non-financial services, so have listened to speeches with both interest and admiration. Most of the points I wanted to make have already been made, so, given the time constraints, I will make a single point that lies behind the detail of the report—the reason why the frictionless movement of talent matters. I invite the Minister to note what I say, but not necessarily respond to it tonight.
The services under debate all deal with people and, in many cases, with people who do not simply produce things or look for a healthy balance sheet at the expense of everything else. They have to do with creativity, culture and connectivity in its widest sense. The benefits as well as the costs of cultural services are sometimes hard to quantify in cash or purely economic terms. My point here is simply to ensure that the particular—perhaps peculiar—nature of some of these services is recognised. The digital economy is a means to a cultural end: connecting people and services, shaping communication and culture, moulding world views as well as behaviours, both individual and social. Creative industries such as broadcasting go beyond   the manufacture of things that can be traded in order to satisfy consumer need or desire: they do something to the pool we swim in as human beings, creating and shaping cultural and societal norms as well as language.
I guess this is what concerns me in every debate about Brexit, and I state it again here simply in order to keep it on the record: the thriving of our economy is crucial to the well-being of our people and our culture, but the economy is not the end; it is the means to an end which is human flourishing and the common good. If we forget this, we become merely utilitarian and materialist. It might sound arcane to some, but the services addressed in this report have to do with values, languages, the meeting of people, cross-cultural communication, the arts, exposure to the unfamiliar, and access to that which is alien and strange. They are, therefore, important for shaping how we see the world, ourselves and human meaning. Perhaps more than other industries and services, they influence future generations in ways that others do not.
Edmund Burke stressed the importance of intergenerational justice in a way that transcends the immediate challenges of today’s economic demands. In the current edition of the New Statesman, Adrian Pabst notes how Burke’s,
“emphasis on covenantal ties between generations can help us think through the growing economic injustice between young and old today”.
He goes on to write:
“Society is not a contract of individuals. It is a partnership between the living, the dead and those yet to be born ... Human beings are not atomised agents maximising their utility. And they are not anonymous carriers of historical laws”.
The creative services build culture. I hope that the concerns expressed in the report concerning the risks to them will be heeded, or, at the very least—pace the noble Baroness, Lady Noakes—that the potential benefits to these services in a changing and challenging technological environment will be identified more clearly as negotiations continue.

Lord Inglewood: My Lords, these days it seems almost unbelievable that until a couple of years or so ago, driving forward the European Union’s single market was perhaps the Conservative Party’s flagship European policy, and had been so for a quarter of a century. This important report by the committee of the noble Lord, Lord Whitty, shows why and how it generated wealth and prosperity for this country, which has helped to pay its bills. For 10 years of that time I served on the European Parliament’s Legal Affairs Committee, as my noble friend the Minister knows, where I played a small role in building that market. It was pernickety, painstaking and often frustrating work. The single market in goods was the most obvious, the single market in financial services perhaps the most high profile, and the single market in services may be the most elusive and the one with most potential. Our country benefits from each of them, and because the single market in services has been scandalously long in gestation, as has been pointed out, if we were to leave the single market now without re-engaging on continuing equivalent terms, we shall be snatching defeat from the jaws of victory.
One of the lessons I learned from that time is the realisation that to have frictionless trade, it is essential to eliminate non-tariff barriers which ingenious protectionist Administrations will be looking to impose while paying lip service to free and fair trade. In this regard lies the importance of the role of the European Commission and competition law and the European Court of Justice in policing that market in the interests of fair play. In this context I emphasise the importance of the principle of direct applicability of law, which gives the small man as much as the rich corporation the benefits of the market. Enforcement of rights is as important as the existence of the right itself, since justice delayed is justice denied, and there is no real right if it is too costly or difficult to enforce.
To establish a working single market you need agreement on, participation in and confidence in a structure that it seems to me has to have three essential components: an arrangement for making rules; the rules and a way that they can evolve; and enforcement. If you move away from this tripartite structure, you go on a journey which inevitably goes from rule maker to rule taker. The more exceptionalism we demand and seek, the less in control we shall be and the less benefit will result for us.
As has been mentioned, it is sometimes said that we can pick up what we may lose from leaving the single market by trading elsewhere in the world. However, I have never found any hard evidence to support that; rather, I agree with the noble Lord, Lord O’Neill of Gatley, who knows much more about these things than I do, who, in a recent article in the New Statesman, points out that trade with the European Union and trade outside the European Union are complementary and not alternatives. I think that that was the point that my noble friend Lady Noakes was making. In this area certainly, we can clearly do better. As the Government themselves have pointed out, both Germany and France are currently more successful in trading with China than we are.
As politicians, we have to be especially alert to the siren song that businessmen will conduct business at the behest of ministerial utterance. For a number of years I chaired a north of England manufacturing company, and the board took its decisions on the basis of what it considered commercial merit—and if there was some government support or, better still, money, that was a bonus.
In the contemporary world of networks we see how the hub structure works across national boundaries, and in the “not impact statements” made available to parliamentarians, we read that five of the top 15 global legal firms are based in London. Spokes radiate from the hub and subsidiary nodes develop, while if power deserts the hub, they may and do turn into the network’s focus. Similarly, in another area with which I have some familiarity and which has been touched on already, the United Kingdom, and in particular London, is the main European centre for broadcasters, be they English-speaking or not. Already, now that they are looking at uncertainty, some are leaving, principally for Amsterdam, and many others are  making plans.
We need to be clear about the oft-quoted proposition that leaving the single market will bring a bonfire of regulations which will turn the United Kingdom into an occidental version of an Asian tiger. Every new Government I can ever remember have promised to slash red tape, but I have never seen it happen. We must remember, first, that a significant number of rules owe their origin to non-EU international agreements. Moreover, the UK Government themselves have often over the years used European Union decision-making to introduce regulation they want to see, as that is a way that is more convenient and discreet. The Prime Minister has ruled out getting rid of a lot of European legislation, so if the present Prime Minister will not do that, I can hardly see the leader of the Opposition taking a radical view and going further. Finally, as has been mentioned, this country seems to like regulation. You only have to look at the gold-plating that has gone on—and let us not forget that Jobsworth is an Englishman.
The more we want to diverge from the single market, the less access we shall be accorded as our counterparties in the negotiations will consider that we will be trying to dump, either socially or economically, our products and services on them. We can speculate as much as we like over what the real options are, but of course it is not simply a matter of what we would like; at least as important is what the other member states would want for themselves. One thing, though, is certain: the more we “take back control” over trade with the European Union, the more we give it away. They are two sides of the same coin.

Lord Berkeley: My Lords, I, too, welcome this report. It sets out a number of options and consequences for the non-financial services industries and gives a great deal more information than was contained in the 58 sector reports that I went to see last week. The security around that reading room was a bit of a joke. I sent two emails to try to get an appointment and did not get a reply, so I turned up. They said, “Well, I suppose you can come”, but they then confiscated my mobile, so I had to rely on my photographic memory. But, frankly, there is nothing in them apart from a load of statistics, which are quite interesting but say nothing about the consequences of different options for Brexit—hard, soft or whatever.
So perhaps I can help noble Lords with a set of figures which I have received from MDS Transmodal on the value of trade in non-financial services; in fact, just-in-time deliveries, which are the most important ones between the UK and various member states. The total was $282 billion in 2016, which is quite a lot of valuable trade going backwards and forwards. As it is just-in-time, these people do not want cargoes to be held up at the frontiers. The most interesting breakdown of the figures is the $3.6 billion of trade between the Irish Republic and the United Kingdom. A lot of people welcomed the Prime Minister’s fudge last week of saying that the single market will still apply to the Republic of Ireland, that Northern Ireland will be a kind of halfway house with no frontier, and that there will be no frontier across the sea between Northern Ireland and the rest of the UK. Somebody needs to explain—perhaps the Minister can do that tonight—how that will work, because $3.6 billion of trade is not to be sniffed at.
The other country with which we do the largest amount of trade is the Netherlands, at $4.5 billion, followed by Germany, Spain and France. Some $30 billion of all that is temperature controlled. If there were delays at the frontiers, as I am sure there will be—the head of customs has said that it will take five years to introduce a computerised system which might minimise delay—one must surmise that some companies such as the major motor manufacturers will say, “Well, we’ve  had enough of this”. Some parts go three or four times between the UK and other member states. How many jobs would be at risk? If we were to take half the trade as being at risk and divide it by, let us say, £50,000 per year for a job, we would end up with a figure of about 25,000 jobs being at risk in the UK and probably a similar number across other member states. I can see why business sees no good reason for wanting change. Why throw all this away? As chairman of the Rail Freight Group I had a meeting with people around Mr Barnier’s transport team in September, and maybe because he saw the inability of the UK Government to know what they want and to negotiate it, he advised the whole industry very strongly to plan for the cliff edge—it might not happen but it could happen. I think that that is a good piece of advice.
Several noble Lords have talked about the free movement of people. I remind the House that in many other member states there is no free movement of people unless you have the right papers. I have friends in Belgium who have British passports and before they are allowed to stay in Belgium and have a residence permit they have to justify to the local authorities that they have enough money to live on and some suitable accommodation. When I asked what would happen if you cannot persuade the authorities of this, my friend said, “I would be put on the next train out of Belgium”. Quite simple. There is no reason why we could not do the same thing here if we wanted to, but there is this obsession with not having identity cards, which I believe is a wonderful excuse for saying we cannot have free movement of people. We could perfectly well control it by everybody having ID cards and that would sort the problem out.
I come to my last point. My noble friend Lord Whitty, in introducing this excellent report, mentioned the problem with air services if we do not get agreement, because of the inability of UK registered airlines to operate on the continent. A similar thing would apply to the European railway agency, which is just as important for the railway sector. To have the same standards across Europe reduces costs of operation and manufacture dramatically. Of course, it relies on experts to deal with this who know what they are talking about, with professional qualifications that are reciprocally recognised. It is not bureaucracy. Everybody talks about European bureaucracy, but we have bureaucracy here—in fact, the European Commission in many ways is more efficient than our Government, I think. The US and Japan all have their own bureaucracy and it is all to do with, “Do you like what we have or do you not like what we have?”.
We will have a big worry in the future because people in the Commission have told me that they want no cherry picking, that they will fight cherry picking to the bitter end. I do not know what is going to happen with the negotiations, but if there is no cherry picking and we go down the route that we seem to be going on at the moment, I see a cliff edge looming. It is time that the Government listened to industry. Industry gave a lot of evidence to this report a year ago and nothing seems to have happened since then, except that they are getting more and more worried. It is time that the Government put their minds at rest.